Business psychology

Psychology within the business area is becoming more and more important nowadays. A lot of research is done and some companies are already trying to implement the results into practice. Especially managers can use a lot of the results of psychological studies in their daily jobs to influence people in what they are doing. Below three important issues will be discussed.

Managing diversity

In every organization the workforce consists of a diverse set of people, including visible and non-visible differences such as ethnicity, gender and characteristics. There are quite some advantages of a diverse workforce, but the most important one is that diverse groups outperform homogenous groups because they have a greater variety of knowledge. Therefore, a manager needs to make sure to have different kinds of employees and use everybody’s talents in an effective manner because this will lead to the best result. However, a diverse group does not always give good results because different people might not understand each other or have conflicting ideas about subjects. Probably, you yourself have experience with this when working in teams for assignments for example. A manager should understand the many kinds of differences between people, not only the most obvious ones such as gender, but also how these differences are perceived by the employees themselves. Research shows that positive outcomes are more likely when employees look at differences as a source of variety rather than as a basis for separation. The challenge for managers is to create this awareness among the employees, which for example can be done by providing training courses.

Rewards

Rewards are often used as an extra motivation for employees. You also work harder when you get a reward for it, right? Rewards are always linked to past behavior and supposed to influence future behavior. A lot of research is done on this topic and two main results were found. Firstly, it was found that behavior that was based on a partial reinforcement schedule, meaning only giving a reward some of the times after good behavior, is much more persistent and likely to continue even when the reward is removed. The research showed that the lower the percentages of correct responses were rewarded, the more persistent the behavior was. Secondly, the most important result that was found was that the most lasting behavior change was found when persons believe that they want to change for their own reasons instead of being rewarded for doing so. This is because when the only justification people give for their behavior are external rewards and consequences, they will not likely develop an internal rationale for these actions.

Goal-setting

Goals are set as an observable and measurable end result of the achievements of objectives. Setting goals sounds easy, but there is a whole theory behind setting goals in a way that people are willing and able to successfully achieve them. Basically it is found that goals that are difficult but not impossible and that are expressed clearly will lead to higher levels of performance than other kinds of goals. The characteristics of a good goal are the following: specific, measurable, agreed, realistic and time-based, shortly SMART. Another important aspect of goal achievement is goal commitment: when the goal matters to the employee the performance is likely to be much higher. The best way to ensure goal commitment is information exchange. When there is a dialogue between the person assigning the goal (the manager) and the person who is expected to achieve it (the employee) then the employee knows the reasons why the specific goal is set, the goal commitment will be higher. Also, feedback is an important aspect of goal performance because in this way the employee is able to refine his strategy along the way and this also makes the employee more committed. All the factors mentioned before lead to an improvement of the work performance.

When managers implement the above mentioned aspects as well as other psychological studies concerning business life a lot of improvement can be gained in terms of performance.

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